Broker vs direct lender: who should shop for your business loan?

Who does the shopping? That’s really what this choice is about. Go direct and you pick the lender, fill in its forms and deal with its credit team yourself. Use a broker and someone else surveys the market, chooses where to send the application and argues your case. Both routes settle thousands of business loans every year. The right one depends on how clear-cut your situation is and how much time you have.

What’s the practical difference?

Going direct means you approach a lender yourself: your bank, a fintech website, a private lender’s phone line. You choose the lender, you handle the paperwork, and the offer you get is that lender’s view of your business.

Using a broker means a credit intermediary compares lenders for you, prepares the application so it reads the way that lender likes, and manages the process through to settlement. The government’s business portal describes the role as helping you find a suitable loan, recommending options and handling most of the paperwork. Our glossary entry on the broker covers the terminology.

Broker and direct, side by side

	Going direct	Using a broker
Choice of lenders	One per application	A panel, which may be wide or narrow
Who prepares the file	You	The broker, from your documents
Speed	Quick if you’ve picked the right lender first time	Quick if the broker knows current lender appetite
Cost to you	No intermediary fee	Usually nothing extra; some brokers charge a fee as well as commission
Advice	The lender explains its own product only	A recommendation across lenders, with reasons
Legal duty	Lender’s contract and any industry code	For business loans, no statutory best interests duty; professional standards vary
Credit enquiries	One per lender you apply to	Ideally one, after the broker pre-screens
Access	Lenders that take direct applications	Also lenders that deal mainly through introducers

When does going direct win?

• You already know who fits. If your bank has been good to you, your financials are tidy and you need a standard product, walking in yourself is often the quickest and cheapest route. Banks reward existing customers, and a long relationship counts.
• The product is simple and online. Small unsecured loans with published criteria are designed for direct applications. If you clearly meet the turnover and trading-time thresholds, a broker may add little.
• You enjoy the detail. Some owners want to deal with the lender’s credit team personally, and that’s a perfectly sound choice.
• You’ve already compared. If you’ve used tools like our business loan finder and know your loan type, going straight to that lender saves a step.

When does a broker win?

• Your bank said no. Working out why, and which lender will see it differently, is exactly what experienced brokers do. Start with our declined by the bank guide.
• The file is complicated. Trusts, multiple entities, tax debt, irregular income, unusual security or a short trading history all benefit from someone who knows which lender is comfortable with what.
• Time is short. A broker who knows a private lender can settle a caveat loan within days may save you a week of cold calls.
• You want to avoid an enquiry trail. Applying to four lenders yourself means four credit enquiries. A broker who pre-screens can usually go to one. If you’re already worried about this, see too many credit enquiries.
• The best lender for you doesn’t advertise. Several specialist and private lenders work mainly through introducers.

Not sure whether you need help or just a nudge in the right direction? Tell us what you’re after and we’ll say which route makes sense.

How are brokers paid, and does it matter?

Most business brokers are paid a commission by the lender that funds the loan. In many cases the lender charges the same price regardless of how the application arrived, so the intermediary adds nothing to your bill. Some brokers also charge the client a fee, particularly for private, complex or urgent deals. Business.gov.au flags the same split: some brokers charge a fee while others are free and earn commission from the lender.

Commission isn’t a problem in itself, but it is a reason to ask questions. Different lenders pay different amounts. Ask your broker to disclose every commission and fee in writing, and to tell you which other lenders were considered.

Why the best interests duty doesn’t cover your business loan

Since 2021, mortgage brokers have had a legal duty under the National Consumer Credit Protection Act to act in a consumer’s best interests. ASIC’s guidance on that duty, RG 273, ties it to consumer lending (money for private, family or household use) and to loans that buy or improve a residential investment property. A loan for a business purpose sits outside it.

That gap matters more than most owners realise. In October 2026 ASIC reported on a review of large broker groups and found that, in seven of the eight groups it examined, brokers didn’t recommend the lowest-cost home loan in more than 20% of cases. ASIC’s view was that a bigger cost difference needs stronger evidence to justify it. That was a review of home lending, where the duty does apply. With a business loan, you’re relying on the broker’s own standards.

The fix is simple: ask your broker to explain in writing why it recommends this lender over the alternatives, what the total cost in dollars is, and what it’s being paid. Good business brokers will be glad to.

An example of each route working

Here are two illustrative cases, not real clients.

A Canberra architecture practice, eight years trading with clean accounts and its main accounts at one bank, needs $90k for new workstations and software. The partners ring their business banker, supply two years of financials and receive an offer within a week. Going direct was the obvious answer.

A Wollongong labour hire business has a $60k ATO balance, a director with a paid default and a payroll gap after a client paid late. Its bank declines. A broker who knows which lenders accept tax debt and paid defaults arranges a short property-secured loan through a private lender that only takes broker introductions, then plans a refinance once the ATO is clear. Going direct here would have meant several declined applications and a growing enquiry trail.

Questions to ask before you choose

If you’re using a broker:

1. Which lenders are on your panel for this kind of loan?
2. What will you earn from this loan, and who pays it?
3. Why this lender over the others, in writing?
4. How many formal applications will you lodge?
5. Do you belong to a professional association, and are you an AFCA member for complaints?

If you’re going direct:

1. Do I clearly meet the lender’s published criteria?
2. What’s the total cost in dollars, all fees included?
3. Does the first step involve a credit enquiry?
4. If it says no, will it tell me why?

Want someone to look at it with you?

When the file is simple, we’ll happily tell you to go straight to your bank. When it isn’t, we can help. Sixty seconds or so is all the enquiry needs, and it isn’t recorded as a credit check, so asking is free of consequences for your file. Nobody on our side forwards it en masse to other funders, so you won’t be bombarded with calls. A specialist on our team reads what you’ve told us and phones to talk it over. Please give straight, precise answers on the form; that’s how the right lender comes up at the first attempt rather than the third.

Ask a real person about your loan →